A translation adjustment must be calculated and disclosed when financial statements of a foreign subsidiary are translated into the parent's reporting currency. How is this figure computed, and where is the amount reported in the financial statements?
Answer to relevant QuestionsThe FASB put forth two theories about the underlying nature of a translation adjustment. What are these theories, and which one did the FASB consider correct?Multiple Choice Questions1. Assume that the U.S. dollar is the subsidiary’s functional currency. What balances does a consolidated balance sheet report as of December 31, 2011?a. Marketable equity securities = $16,000 and ...On December 18, 2011, Stephanie Corporation acquired 100 percent of a Swiss company for 3.7 million Swiss francs (CHF), which is indicative of fair value. At the acquisition date, the exchange rate was $0.70 = CHF 1. On ...Livingston Company is a wholly owned subsidiary of Rose Corporation. Livingston operates in a foreign country with financial statements recorded in goghs (GH), the company’s functional currency.Financial statements for the ...Charles Edward Company established a subsidiary in a foreign country on January 1, 2011, by investing FC 3,200,000 when the exchange rate was $0.50/FC. Charles Edward negotiated a bank loan of FC 3,000,000 on January 5, ...
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